AngelList is working on a new project called Maiden Lane. Behind this name is a new experiment in startup investment. Structured as a traditional small VC firm, Maiden Lane will only invest in AngelList syndicates or hand some money to active angels on the platform.
While technically not part of AngelList, Maiden Lane currently has two general partners, AngelList’s chief operating officer Kevin Laws and Dustin Dolginow of Atlas Venture. The fund raised money from traditional limited partners who fund VC firms.
When it comes to Maiden Lane’s deal structure, the firm will not charge any management fee and will take a 30 percent of carried interest, meaning the fund is slightly more competitive for limited partners than a traditional VC firm.
At the other end of the deal, Maiden Lane will invest some of its first fund in syndicated deals that it will hand pick. But the most interesting part is that the firm also plans to give $200,000 to the platform’s top investors, such as Tim Ferriss, Elad Gil, Gil Penchina and more.
Another innovation, Maiden Lane will give back 20 percent in carry to these angel investors — Maiden Lane partners keep the remaining 10 percent. By betting on AngelList’s power user, Maiden Lane hopes that it will invest in the best startups on AngelList.
As a reminder, AngelList started out as a database of angels, startups and investments. In July 2013, the company introduced syndicates — business angels can choose to co-invest with influential angels directly on AngelList.
In these syndicated deals, the lead angel sets the carry percentage as he’s the one pulling the trigger and making a bet on a startup. AngelList itself takes 5 percent in carry for facilitating the deal. It’s a powerful way of amplifying deals and motivating influential business angels.
With Maiden Lane, top angels will get money directly from limited partners who usually work with VC firms. It’s the logical next step for AngelList, and an interesting one. Disrupting VC investment is no small feat — it is now clear that AngelList is aiming for that, one experiment at a time.